THE suspense should be over within hours when the FM lets his Budget cat out of the bag. If markets were to crash in reaction, we would once again count the cash in our hands fondly, like a pet suffering from stunted growth. "Cash Before you Crash" may well be the apt title for the day. It is "a complete manual on credit and accounts receivable operations, EDI, supply chain management and ERP environment", written by A. K. Guha and N. H. Atthreya, and now in the second edition, from Viva Books P Ltd (www.vivagroupindia.net). Do not turn to read the back-cover at the start, because it dares you with a question: "Do you calculate how much interest per day your company is losing on overdue debtors?"

You can have the finest product, the lowest possible wastage, superb sales record and a dedicated workforce.

But if all these do not get oxygen in the form of money, in time, everything will vanish soon enough. A quote from Joseph T. Straub is pertinent: "A long collection period may mean you're profitable on paper  while you are sinking fast."

The seller is often reduced to worrying like Hamlet: "Will the customer pay, or won't he?" There is a cascading effect when debtors fail to pay on time. You need to raise your working capital. But if you push too much, there could be a goodwill loss. Use risk analysis to categorise your customers as A, B, C and D, and set credit limits appropriately, advise the authors. Chapter seven summarises what accountants take many years to learn: "The game of debit and credit". A mishmash actually, incorporating EDI, ERP, SCM and so on.

Among "tools for the job" the book would list "cash trap in contract", and provide example clauses.

Likewise, control of float is explained diagrammatically depicting at least half a dozen floats. "Effective collections do not just happen," remind the authors. "They are the result of planning. Targets should be realistic." If you don't want to age running after AR, do an ageing analysis.

"The most effective method that has helped to monitor/ control overdue debtors on a monthly basis is by asking the division heads to comment on old debtors, why the payments are not forthcoming, what is the dispute and how this can be resolved." Get them provide a time schedule for collecting these debts.

Profit is just an idea, cash is fact! So, make sure you celebrate when achieving your collection target. "You can never believe what momentum it can create for your cashflow." A not-to-be-missed chapter is `art of collection', where the authors discuss visits, phone calls, and e-mails. "Talk at the right time with the right person and with correct detail. In India in many proprietary companies, one gets payment only if they ask the proprietor. Any attempt down the level will not help."

A tip: "Make sure first of all that you are speaking personally to your debtor before you announce your own identity."

Be urgent, is another exhortation: "Make the debtor feel that he must pay today. Unless you make the debtor feel this urgency, he won't think today is any different from any other day."

For that, you must `act early'. That is, "if payment is due on 31st of a month and you don't get it, act on that day and from that day." Other principles are: Renegotiate, help him indirectly, explore a barter, consider political ploys, initiate court action, write off, and learn a lesson.

Credit control department can be a profit centre. Also, you can measure its performance. Expressing debtors as DSO (short for days of sales) is a simple yardstick. Calculate debtors as a percentage of sales, and do a similar exercise with cash collected as percentage of collectibles. Service industry, which sells the invisible, has a separate chapter in the book.

An interesting section is on classification of debtors as follows: Debtor misunderstood terms, disputed amount, careless or inefficient customer, small amount involved so customer ignores, slow by habit, poor business management, temporarily out of funds but good, could pay but must be forced, terms chiseller, and lastly, a fraud.

Between editions, the book has grown in size and the gamut of its coverage, as also the urge with which authors want you go and collect that errant rupee. Read before you crash.